Exports to US fall: Marine, auto, jewellery find new markets, Pg1

Key Highlights:

• Indian goods exports, impacted by 50% US tariffs effective August 27, are finding alternative markets in Asia and Europe.
• Gems and jewellery exports to the US fell by 76% in September, but overall exports only dipped 1.5% due to increased shipments to the UAE, Hong Kong, and Belgium.
• Marine product exports grew by 25% in September and 11% in October, driven by higher exports to China, Japan, Thailand, and the European Union.
• Shrimp exports, which accounted for $4.88 billion in FY25, are particularly affected by the US tariffs due to their low-margin nature.

Detailed Insights:

• The Commerce and Industry Ministry data reveals that while some sectors successfully diversified, low-margin, labor-intensive sectors like cotton garments and sports goods struggle due to competition from China and ASEAN countries.
• Sports goods exports, with 40% destined for the US, experienced a 6% decline in October due to the tariffs, while cotton garment exports also faced diversification challenges.
• The government is encouraging diversification, particularly for labor-intensive items like marine products, leading to a 25% increase in EU approvals for Indian units, with 102 additional units cleared.
• While diversification efforts are underway, officials estimate that only $2 billion worth of exports can be redirected to new markets, compared to over $8 billion in shipments to the US before the tariffs.
• An SBI Ecowrap report indicates that India's exports are finding alternatives, with increased exports to the UAE, China, Vietnam, Japan, Hong Kong, Bangladesh, Sri Lanka, and Nigeria.
• The report also notes a decline in container shipments from India and China, with a corresponding rise in shipments from Indonesia, Thailand, and Vietnam, suggesting rerouting due to the tariffs.

Key Concepts Involved:

• Tariffs: Taxes imposed on imported or exported goods.
• Diversification: The process of shifting export markets to reduce reliance on a single country.
• Trade linkages: Established trade relationships and agreements between countries.